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Ruto defends new compulsory 2.75% deduction for salaried Kenyans

President Ruto: Everybody should pay 2.75% but we are ready to listen to the opinion of Kenyans.

President William Ruto during the 14th Anniversary of the Joyful Women Organisation, Kasarani, Nairobi County

President William Ruto has defended introducing a 2.75% compulsory tax for salaried Kenyans.

Speaking during the 14th anniversary of the Joyful Women Organisation, in Kasarani, Nairobi County on Thursday, President Ruto said the 2.75% tax imposed will finance the Social Health Insurance Fund that will replace the National Health Insurance Fund.

The head of state explained that the ambitious program aims to lift the burden of paying hefty hospital bills from many Kenyan households with a low income.

According to President Ruto, statistics show low health insurance coverage in Kenya at only 26%.

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Those at the bottom of the economic pyramid have the least coverage of less than 5%.

“Everybody should pay 2.75% but we are ready to listen to the opinion of Kenyans. We want Kenyans to tell us who should pay what,” he said.

President Ruto seemed to overrule an earlier statement in September by Health CS Susan Nakhumicha. She said that the contribution would be capped at Sh5,000.

In addition to salaried Kenyans, those running micro, small and medium enterprises would also benefit from the SHIF.

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This comes just days after the gazettement of the Social Health Authority board led by Timothy Olweny as the chairperson.

In a gazette notice issued on November 22, Health CS Susan Nakhumicha also appointed Francis Atwoli, Dr Zakayo Kariuki Gichuki and Jacinta Kathamu Muteg to the board.

This follows the signing of four Universal Health Coverage bills by President William Ruto.

They are the Primary Health Care Act, 2023, the Digital Health Act, 2023, the Facility Improvement Financing Act, 2023 and the Social Health Insurance Act, 2023.

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The new system replaces the existing National Health Insurance Fund (NHIF) and introduces three new health funds:

  • Social Health Insurance Fund, 
  • Primary Healthcare Fund, and 
  • Chronic Illness and Emergency Fund
  • Eligibility: All Kenyan adults, newborn babies, and foreigners who have been living in the country or intend to stay for more than 12 months are eligible to join the Social Health Insurance Fund. 
  • Funding: The government will make payments on behalf of non-salaried households, prisoners, and employers, while national and county governments will also contribute to the fund. Only members who actively contribute shall access health services.
  • Primary Healthcare Services: The new system focuses on early diagnosis, early intervention, prevention of health conditions, mental health and well-being recognition, and more.
  • Digital Health Agency: The Digital Health Agency will ensure Kenya embraces electronic health records and other digital health solutions.

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